Central Hudson contributes $12 million in earnings to new Canadian owner

Nov. 2, 2013

Written by

Poughkeepsie Journal

The new owners of Central Hudson Gas & Electric Corp. sound pleased with the early integration of the Poughkeepsie-based utility into their Canada-based corporation, Fortis, Inc.

But it will be awhile before it really pays off for Fortis and its shareholders, the management said Friday.

The quarterly report issued by Newfoundland-based Fortis was the first one in which Central Hudson appeared as a piece, joining other utility companies across Canada and in the Caribbean.

“Central Hudson has successfully integrated into the Fortis family,” said H. Stanley Marshall, president and CEO of Fortis.

“The acquisition is expected to be accretive to earnings per common share of Fortis beginning in 2015,” he said.

That means it will take that long to get past the impact of costs incidental to the $1.5 billion deal that closed June 27, and begin boosting Fortis’ earnings per share.

Central Hudson did about the same as in the third quarter of 2012, when it was part of CH Energy Group. That is the parent company that Fortis bought, thus acquiring Central Hudson and other subsidiaries.

Central Hudson contributed $12 million in earnings in Canadian dollars, Fortis said, using the exchange rate of $1.04 Canadian to $1 U.S.

It said Central Hudson had revenue of $170 million.

One part of the Fortis deal that directly affects customers is that there will be no delivery rate increases prior to July 2015.

The final say on any change remains with the New York state Public Service Commission, which approved the sale after intense controversy around the sale.

Investment in the gas and electric infrastructure continues, said Central Hudson spokesman John Maserjian. The plan is to spend more than $84 million in 2013.

Fortis reported third-quarter earnings were $48 million in Canadian dollars, or $0.23 per share, versus $45 million, or $0.24, in the third quarter of 2012.

Fortis’ shares closed up 4 cents, at $32.47, on the Toronto Stock Exchange.